Strategic planning at Lukoil after good start
The Russian major company’s board of directors summarized preliminary 2018 results and set priorities for 2019 along the 2018-2027 development program
At a meeting held in Moscow to summarize preliminary 2018 results and set priorities for 2019 under the Strategic development program for 2018-2027, the Board of Directors emphasized that Lukoil successfully accomplished the first year's interim goals within the 10-year strategy and achieved significant progress in delivering key projects and strategic initiatives.
In 2018 design production capacity was reached at the Vladimir Filanovsky field and gas projects in Uzbekistan, rapid ramp-up of hard-to-recover crude oil production continued in West Siberia and Timan-Pechora. Construction works of petroleum residues conversion complex based on delayed coker unit started at Nizhny Novgorod refinery.
Sales volumes via premium sales channels increased and industrial safety indicators improved too.
Work was intensified to optimize costs and increase efficiency of operations, new incentive tools were introduced for the key employees, the main part of treasury shares was cancelled and the share buyback on the open market was started.
Among key priorities for 2019 the Board of Directors determined accident-free operations and attainment of key performance indicators, cost optimization and efficiency improvements, maintaining investment discipline and delivering on a policy of capital distribution to shareholders.
“The actions taken as part of implementing the strategy approved a year ago have already proved their high efficiency. We successfully develop our business and consistently fulfill our obligations in respect of shareholder distributions despite high volatility of external factors. This is facilitated by our approach to planning and making investment decisions based on a conservative oil price scenario, as well as persistent efforts on improving efficiency” said President Vagit Alekperov who in December 2018 signed with Chairman of the Management Board of JSC NC KazMunayGas Alik Aidarbayev agreements on joint cooperation and financing of the Zhenis project in the Kazakhstan's sector of the Caspian Sea.
Earlier in October of last year the official groundbreaking ceremony, to mark the start of construction of infrastructure facilities of Rakushechnoye field, Astrakhan Region, was held; commercial oil production, with an estimated plateau level of 1.2 million tonnes, is expected to commence in 2023.
Finally in September 2018, Lukoil commissioned a Gas Processing Complex at the Kandym fields cluster in Uzbekistan, whose construction was completed just 2 years since its start and 8 months ahead of the schedule. The official opening ceremony was attended by President of the Republic of Uzbekistan Shavkat Mirziyoyev, Minister of Energy of Russian Federation Aleksander Novak and Lukoil’s President Vagit Alekperov.